The picture above is of the bridge over the Choluteca River. Honduras, known for its extreme weather, namely hurricanes, commissioned the bridge in 1996 to withstand any storms. A Japanese company competed the bridge in 1998 when Hurricane Mitch tore through the country. Mitch dropped 74 inches of rain, killing 7,000 people, leaving 1.5 million homeless, and causing $2bn of damage. Also Mitch damaged or destroyed nearly all the bridges, but the new Choluteca Bridge survived with minor damage.. Thus it met its requirement, it withstood the worst storms. However, with deluge from Mitch the roads on either end of the bridge had completely vanished, leaving no visible trace of their prior existence. Also, the Choluteca River, which is over 100 metres (300 ft) at the bridge, had carved itself a new channel. It no longer flowed beneath the bridge, which now spanned dry ground.
Roads have since been reconnected to the bridge; however, the moral of the story is that things should not be “built to last,” but “built to adapt.” As I have mentioned before, most people get Darwin evolution wrong when they use the term “Survival of the fittest.” In Darwinian terms, fittest refers to biological reproduction, so what Darwin meant was “Survival of the form that will leave the most copies of itself in successive generations.”
Well, COVID has once more shaken our core processes and what “got us to here, is not going to get us to there.” To survive we have to adapt and change what we do. Due to the failure to understand that this is public health crisis first and foremost, and until we deal with that the rest cannot be fixed, I expect we will be living in a COVID environment for at least another year. So new methods and models have to determined for survival.
In one of my Vistage group meetings this week we shared how we had adapted to the COVID world doing things that we had never considered before. Some of the wonderful new practices were:
- Enabling piece production to be done at home by providing the employees with the materials and tools and paying the by the piece rather than hourly. The company then did full QA on all pieces when they were picked up. The company found that production levels rose slightly. Employee satisfaction rose too, as people were able to work at home and deal with kids who cannot go to school.
- Entering new markets to provide COVID related solutions and then expanding within those market to offer more services. These new markets are providing sufficient revenue to make up for those markets damaged by COVID.
- Training and recruiting people in areas that the company expects will be active soon as a result of COVID. Building a bench of talent to meet new demand.
- Having weekly video calls with the entire global team where each week one person presents on their passion project within the organization. These calls have lead to great connectivity between employees and departments. Employees now have a better understanding of the challenges faced in other departments, and people are contributing to other’s passion projects across deparments.
- Restructuring the sales department as the existing sales team was struggling to prospect in the virtual world. Have younger more tech savvy people doing business development work and connecting with prospects. Once the connection is made these relationships are handed over to old sales team.
The above is why Vistage groups are so wonderful! The sharing of ideas that work and those that don’t help everyone.
So what are you doing? Are you waiting for the return to a pre COVID world, aka Waiting for Godot, or are you being proactive to find new ways to drive sales, production, product development and improve internal processes? As a leader, you need to lead the way for your organization so that you will around and relevant in a year. It is hard during times like this, but that is why you are the leader. If you need help, join a Vistage group, help is there.
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As we emerge from COVID, the current employment environment makes me think of a surfing concept: “Being Caught Inside When a Big Set Comes Through.” Basically, the phrase refers to when you paddle like crazy to escape the crash of one wave, only to find that the next wave in the set is even bigger—and you’re exhausted. 2020 was the first wave, leaving us tired and low. But looking forward, there are major challenges looming on the horizon as business picks up in 2021. You are already asking a lot of your employees, who are working flat out and dealing with stress until you are able to hire more. But everyone is looking for employees right now, and hiring and retention for your organization is growing more difficult.
“Why don’t they use common sense?!” You may have said this phrase yourself, or heard it with your managers, when discussing an employee’s actions. However, the frustrated appeal to “common sense” doesn’t actually make any meaningful change in your organization. We all make decisions based on the information we have and the guides we have to use. So if the wrong decisions are being made in your organization, it’s time to examine the tools you give decision-makers.
You can only determine profitability when you know your costs. I’ve discussed before that you should price according to value, not hours. However, you still need to know your costs to understand the minimum pricing and how it is performing. Do you consider each jobs’ profitability when you price new jobs? Do you know what you should be charging to ensure you hit your profit targets? These discussions about a company’s profitability, and what measure drives profit, are critical for your organization.
If you were starting your business today, what would you do differently? This thought-provoking question is a valuable exercise, especially when it brings up the idea of “sunk costs” and how they limit us. A sunk cost is a payment or investment that has already been made. Since it is unrecoverable no matter what, a sunk cost shouldn’t be factored into any future decisions. However, we’re all familiar with the sunk cost fallacy: behavior driven by a past expenditure that isn’t recoupable, regardless of future actions.
Bringing clarity to your organization is a common theme on The Disruption! blog. Defining your business model is a worthwhile exercise for any leadership team. But how do you even begin to bring clarity into your operations? If you’re looking for a place to start, Josh Kaufman’s “Five Parts of Every Business” offers an excellent framework. Kaufman defines five parts of every business model that all flow into the next, breaking it down into Value Creation, Marketing, Sales, Value Delivery, and Finance.